For continuity sake, I posted the original letter in question
dated on 1/1/07.
I REFER to the letter, 'Why sale of state land is done at market
price' by Ms Kee Lay Cheng of the Housing and Development Board
(ST, Dec 28 ).
Mr Ngiam Tong Dow has a very interesting thing to say about land
pricing in Singapore in his book: A Mandarin And The Making Of
Public Policy, on page 153:
'Sadly the clarity of thought shown by Dr Goh Keng Swee in pricing
land has been lacking in more recent years. Relying on the concept
of opportunity cost, the Chief Valuer, at the behest of either the
Ministry of National Development or the Ministry of Trade and
Industry (I am not sure which), has valued land across Singapore
using Raffles Place land as the benchmark. The assumption is that
every square metre of land in any part of Singapore has the
potential to be Raffles Place.'
Would the HDB like to comment how this has affected the pricing and
allocation of subsidy of new HDB flats?
Viktor Ye Kok Kheong
Originally posted by LinYu:
[b]Settle question of HDB subsidy once and for all - ST
Forum 2 Jan 2007
I REFER to Mr Viktor Ye Kok Kheong's letter, 'Did HDB land pricing
use Raffles Place as rule?' (ST, Jan 1).
The Housing Board said that 'HDB does not reveal the land and
construction costs of specific projects as they vary from location
to location... That is why it incurs an overall deficit each year
for its home-ownership activity, as reflected in its annual
accounts which is available publicly'.
The reason given for not revealing the land and construction costs
is somewhat illogical, because the HDB is not being asked to
disclose the costs of every project or location. Why not just
reveal the breakdown of total costs, and a few examples of some
projects and locations, now and in the past?
What the HDB is saying is akin to 'since we cannot tell you each
and every item, we won't tell you anything at all'.
Every once in a while, the question of the cost and pricing of HDB
flats comes up in the media. So, why not put a stop to the on-going
speculation that HDB flats are not really subsidised?
In the interest of maintaining Singapore's reputation of having the
highest standards of transparency and corporate governance, the HDB
should keep up with the standards of disclosure in the private
sector.
To illustrate the point of transparency, no real-estate investment
trust or publicly-listed company would be able to give the reason
given by the HDB for not breaking down the information on the major
cost components in its accounting statements.
How can we tell whether HDB prices are 'at market price' without a
breakdown of the land and construction costs for comparison
purposes?
As to the market price for land taking into account the
'substantial resources... invested to provide major infrastructure,
such as roads, MRT, sewers and utilities, for the new housing
development', thus significantly enhancing the land value beyond
the acquisition costs incurred by the Government, aren't the
billions collected every year from road tax, electronic road
pricing, property tax, 30 per cent water- conservation tax, etc,
supposed to be used to provide such infrastructure?
Leong Sze Hian
[/b]
